Dec 16, 2011

Kalypso Issues Top 5 Innovation Predictions for 2012

While PLM adopts the cloud, social innovation practices will get less cloudy; PLM will become ubiquitous in markets like CPG; 'reverse innovation' continues to grow; costs for failing to keep consumers safe will become dire.

BEACHWOOD, Ohio – Kalypso, the world's premier innovation consulting firm, released its top five predictions in innovation, product development and product lifecycle management (PLM) for 2012 today. The firm anticipates key trends in the areas of PLM technology, the cloud, social product innovation strategies, “reverse innovation” and consumer safety.

1. PLM adopts the cloud - With the recent release of new cloud-based PLM technologies from Dassault Systèmes and Autodesk, companies have a growing list of options for transitioning to cloud-based PLM systems. This, coupled with cloud-based energy savings and the potential to reduce cost of software ownership, will likely draw more companies to these solutions.

"In 2012 we will see a number of firms start exploring cloud-based PLM solutions, particularly small to midsize companies in industries like consumer packaged goods (CPG) that tend to be more green-conscious," said George Young, a founding and managing partner at Kalypso.

2. Social innovation practices get less cloudy - In Kalypso’s recent study on how social media is impacting innovation and product development, almost half (46 percent) of surveyed companies admitted that they are not sure which approaches work. Over one-third (36 percent) said they are challenged by a lack of internal expertise or best practices to follow.

"In 2012 we will see more clarity as organizations find tangible ways to take advantage of the power of social computing platforms to transform the way products are developed," said Bill Poston, a founding and managing partner at Kalypso. "Some companies will be dipping their toes into the field of social technologies and product development for the first time, while others will be developing more targeted strategies and metrics systems for their social product innovation programs.

3. Shift to emerging markets continues - Recent research reports indicate that as high as 40 percent of companies plan to shift foreign investments from developed to emerging markets in the upcoming years.

"With this shift in investment to emerging markets, we plan on seeing a large spike in ‘reverse innovation’ – developing products specifically for breakthrough markets," said Poston. "Furthermore, these products will then be at price points that are attractive to developed markets."

4. PLM becomes ubiquitous in consumer packaged goods industry – CPG companies have traditionally lagged behind other industries in adopting PLM to drive innovation, despite an industry focus on product and process innovation. However, critical industry factors over the last several years, such as supply chain and raw material cost fluctuations and regulatory compliance, have caused a shift in the industry that has led to an influx of CPG companies adopting PLM as a core business process.

"Over the next 18 to 24 months, PLM will cease to be a competitive advantage in CPG," said Young. "Just as ERP was a competitive advantage at first, we're going to see the same thing happen with PLM in CPG."

5. Failure to keep consumers safe leads to criminal prosecutions – As numerous product recalls have demonstrated over the last several years – most recently with this year’s cantaloupe recall – product quality and safety issues can result in much worse things than lost revenue. Particularly in the world of food and beverage product safety, manufacturing executives who fail to meet regulatory standards may face jail time.

"The recent criminal prosecution of executives from the New Jersey-based dietary supplement companies QLF and ASN is just the start of criminal prosecutions for violating food or beverage safety," said Young. "As we look ahead to 2012, we expect to see at least one large food company put in jail for this very reason."